Greyhound Australia Pty Ltd v Deluxe Coachlines Pty Ltd

[1986] FCA 265

Re: MARYON CATHERINE TODD
Ex parte: MARYON CATHERINE TODD; DESMOND ELLIS TODD; CAMERON McDONALD FINLAY;
BRIAN RAYMOND GENT
No. QLD E154 of 1980
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE SOUTHERN DISTRICT OF THE STATE OF QUEENSLAND
Pincus J.

CATCHWORDS

Bankruptcy - S.81 summons - bankrupt discharged - whether still a "bankrupt" for purposes of Act - no power to issue summons after discharge.

Bankruptcy Act, 1966 ss.5, 55(8); 69; 81; 152(1); 153; 265(1): 269

HEARING

BRISBANE

#DATE 8:8:1986

ORDER

1. The summons issued by the Registrar on 16 June 1986 be set aside.

2. The respondent pay the costs of and incidental to the proceedings, to be taxed.
NOTE: Settlement and entry of orders is dealt with in

Rule 124 of the Bankruptcy Rules.

JUDGE1

These are applications made to set aside summonses issued by the registrar on 16 June 1986 purporting to be under s.81 of the Bankruptcy Act. The bankrupt became so on her own petition on 3 April 1980 and obtained an unconditional discharge on 22 July 1981.

1. Mr. Bourke, who appeared for the applicants, relied on two arguments. The first was that the power to summon people to attend under s.81 cannot be exercised after the bankrupt in question has been discharged. The second point was in substance that, if there is power to issue summonses, it was exercised oppressively. Since that depends upon rather complex facts, it is convenient to consider the jurisdictional point first.

2. Section 81(1) is as follows:
   
   

"The Court or the Registrar may, on the application of a creditor who has proved his debt and on such terms as to costs as the Court or the Registrar thinks fit to impose, or on the application of the Official Receiver or the trustee, at any time summon -

(a) the bankrupt or the spouse of the bankrupt; or

(b) a person who is known or suspected to have in his possession any of the property of the bankrupt, or is supposed to be indebted to the bankrupt or to be able to give information concerning the bankrupt or his trade dealings, property or affairs,

to attend, on a date and at a time and place fixed in the summons, before the Court or the Registrar or, if the Court or the Registrar thinks fit, before a Magistrate, to give evidence concerning, and produce any books (whether or not in existence at the time the bankrupt became a bankrupt) in his custody or power relating to, the bankrupt or his trade dealings, property or affairs."

1. Mr. Gibson, who appeared for the respondent Official Receiver, relied primarily upon the definition of "bankrupt" in s.5 which is as follows:
   
   

"'bankrupt' means a person -

(a) against whose estate a sequestration order has been made; or

(b) who has become a bankrupt by virtue of the presentation of a debtor's petition;".

It was argued that, because of the definition, a person who has become a bankrupt thereafter remains a bankrupt, without limit as to time.

1. I was referred, however, to a provision having a contrary tendency, namely s.55(8) which is as follows:
   
   

"A person who becomes a bankrupt by force of this section continues to be a bankrupt until -

(a) he is discharged by force of section 149;

(b) he is discharged by order of the Court; or

(c) his bankruptcy is annulled under section 74 or 154."

This sub-section deals only with persons who have become bankrupt on a single debtor's petition, but there are similar provisions relating to those the subject of creditors' petitions (s.43(2)) and other sorts of debtors' petitions (s.56(16) and s.57(10)). It is, plainly, possible to reconcile the definition of "bankrupt" with these provisions, by reading the former as subject to the latter.

1. On the face of it, the effect of the provisions just mentioned is that the status of bankruptcy ceases with discharge. Mr. Gibson admitted that to be so, but claimed that there is a distinction between having the status of bankruptcy and being properly called a bankrupt.

2. It is true that at some places in the Act the word "bankrupt" is used in a sense which does not necessarily mean "undischarged bankrupt". Examples are to be found in those provisions which use the expression just quoted - e.g. s.260(1)(a)(ii). If the word "bankrupt", without addition, means a person who has not yet got a discharge, then the expression "undischarged bankrupt" is tautologous. However, these usages may be able to be explained as emphatic or adopted out of an abundance of caution.

3. In s.269 the expression "undischarged bankrupt" appears to be used in this way. The first part of that section reads:
   
   

"A bankrupt shall not -

(a) either alone or jointly with another person, obtain credit to the extent of $500 or more from a person without informing that person that he is an undischarged bankrupt;".

It is noteworthy that the provision does not begin "An undischarged bankrupt shall not ...". There, the concern of the legislature is to require that the bankrupt underline his status by describing himself as undischarged. Where no need for emphasis arises, however, the draftsman is content to use the expression "a bankrupt" as referring to a person who is not yet discharged. An example of this is to be found in s.265(1) which begins:

"A bankrupt -

(a) shall, to the best of his knowledge and belief, fully and truly disclose to the trustee all his property, and its value;".

Plainly, the obligation of disclosure is not intended to be lifelong.

1. Under s.153, discharge releases a bankrupt from his debts, with certain exceptions. It may be thought to be arguable that s.153 exhaustively prescribes the consequences of discharge. However, that would seem plainly not to be so; the disabilities of bankrupty created by the Act are surely not intended, in general, to survive discharge.

2. Section 152(1) says that:
   
   

"A discharged bankrupt shall, notwithstanding his discharge, give such assistance as the trustee reasonably requires in the realisation and distribution of such of his property as is vested in the trustee."

It was argued that the purpose of this provision is to provide the trustee with some remedy against the discharged bankrupt, there being no right to examine him under s.69 (the public examination provision) or s.81. In my view that is correct. There was some debate as to whether this is a convenient result. It does not seem so evidently inconvenient as to require a departure from the ordinary meaning of the words used.

1. Counsel referred me to a line of English authority beginning with Re Coulson; Ex Parte Official Receiver (Trustee) (1934) 1 Ch 45 in favour of the view that the power to require attendance under the English equivalent of s.81 may be exercised after discharge. Attention was drawn to the fact that Clyne J. regarded Re Coulson as applicable to the Bankruptcy Act 1924: Re Walker (1952) 16 ABC 69 at 72. Lockhart J. confessed to reservations about this line of authority in Re Balhorn; Ex Parte Balhorn and Official Trustee (1981) 39 ALR 223 at 225. It does not seem necessary to determine whether Re Coulson should be followed, because the provisions of the English Act of 1914 on which it was based are not closely similar to those with which I am concerned; in particular the relevant English provision uses the word "debtor", not "bankrupt".

2. It appeared to be suggested that even if a discharged bankrupt is not himself liable to be summoned under s.81, those who are suspected to have property of his in their possession, or the like, are so liable. That would seem to be an anomalous distinction. If "bankrupt" in s.81(1) means "undischarged bankrupt" then in my view no-one may be summoned under it, in respect of the affairs of one who has obtained a discharge; otherwise the word "bankrupt" has to be given two meanings in the one sub-section.

3. In summary, I accept Mr. Bourke's contention that the power to issue a summons under s.81 applies only when the person to whose affairs the proposed evidence would relate is, at the time, a "bankrupt", by which is meant an undischarged bankrupt.

4. The applications must succeed, and with costs.